Question

Douglas Fur is a small manufacturer of fake-fur boots in Philadelphia. The following table shows the company's total cost of production at various production quantities. 

Fill in the remaining cells of the following table. 

Quantity (Pairs)	Total Cost (Dollars)
0	60
1	155
2	220
3	255
4	300
5	350
6	450

On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $155, so you should start your ATC curve by placing a green point at (1, 155). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $95, so you should start your MC curve by placing an orange square at (0.5, 95).) 

Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. ?

Answer 1

Quantity	Total Cost	Marginal Cost	Fixed Cost	Variable Cost	Average Variable Cost	Average Total Cost
0	60	-	60	0	-	-
1	155	95	60	95	95	155
2	220	65	60	160	80	110
3	255	35	60	195	65	85
4	300	45	60	240	60	75
5	350	50	60	290	58	70
6	450	100	60	390	65	75

Marginal Cost = Total Cost at Qth unit of Output - Total Cost at (Q - 1)th Unit of Output

Fixed Cost = Total Cost when production is zero

Variable Cost = Total Cost - Fixed Cost

Average Variable Cost = Variable Cost / Quantity

Average Total Cost = Total Cost / Quantity

180 160 1, 155 140 120 2, 110 MC 1.95 100 6, 100 1.95 Cost -3, 85 2,80 80 -4.75 5,70 ATC 6,75 3,65 4,60 5,58 60 6,65 AVC 2,65 5,50 40 -4, 45 -3,35 20 0 0 1 2 5 6 7 3 4 Quantity of Output